Hematuria is a prevalent symptom associated with bladder cancer (BC). However, the invasiveness and cost of cystoscopy, the current gold standard for BC diagnosis in patients with hematuria, necessitate the development of a sensitive and accurate noninvasive test. This study introduces and validates a highly sensitive urine-based DNA methylation test. The test improves sensitivity in detecting PENK methylation in urine DNA using linear target enrichment followed by quantitative methylation-specific PCR. In a case-control study comprising 175 patients with BC and 143 patients without BC with hematuria, the test's optimal cutoff value was determined by distinguishing between two groups, achieved an overall sensitivity of 86.9% and a specificity of 91.6%, with an area under the curve of 0.892. A prospective validation clinical study involving 366 patients with hematuria scheduled for cystoscopy assessed the test's performance. The test demonstrated an overall sensitivity of 84.2% in detecting 38 cases of BC, a specificity of 95.7%, and an area under the curve of 0.900. Notably, the sensitivity for detecting Ta high grade and higher stages of BC reached 92.3%. The test's negative predictive value was 98.2%, and the positive predictive value was 68.7%. These findings highlight the potential of the PENK methylation in urine DNA using linear target enrichment followed by quantitative methylation-specific PCR test in urine as a promising molecular diagnostic tool for detecting primary BC in patients with hematuria, which may reduce the need for cystoscopy.